A defiant Muammar Gaddafi vowed on Tuesday to die "a martyr" in Libya and said he would crush a revolt which has seen eastern regions already break free from four decades of his rule.

Swathed in brown robes, Gaddafi seethed with anger and
banged the podium outside one of his residences that was damaged in a 1986 U.S.
bombing raid that attempted to kill him. Next to him stood a monument of a fist
crushing a U.S. fighter jet.

"I am not going to leave this land, I will die here
as a martyr," Gaddafi said on state television, refusing to bow to calls
from his own diplomats, soldiers and protesters clamouring in the streets for
him to go.

Huge popular protests in Libya's neighbours Egypt and
Tunisia have toppled entrenched leaders, but Gaddafi said he would not be
forced out by the wave of dissent sweeping through his vast and sparsely
populated oil producing nation, which stretches from the Mediterranean to the
Sahara.

"I shall remain here defiant," said Gaddafi who
has ruled Libya with a mixture of populism and tight control since taking power
in a military coup in 1969.

The White House offered its condolences for the
"appalling violence" in Libya and said the international community
had to speak with one voice on the crisis, but Washington has little leverage
over Libya which was a U.S. adversary for most of Gaddafi's 41-year rule.

U.N. Secretary General Ban Ki-moon accused Libya of
firing on civilians from warplanes and helicopters. The U.N. Security Council
met in closed session to discuss Libya. The U.N. high commissioner for human
rights said "systematic attacks" on civilians may amount to
"crimes against humanity."

The Arab League suspended the participation of Libya's
delegation, Al Arabiya television said.

German Chancellor Angela Merkel said Gaddafi had declared
war on his people and told a news conference she would back sanctions on Libya
if Gaddafi did not stop the violence.

GADDAFI DEFIANT

But Gaddafi was unrepentant. Anti-government protesters
were "rats and mercenaries," he said, who deserved the death penalty.
Gaddafi said he would call the people to "cleanse Libya house by
house" unless protesters surrendered.

Gaddafi urged Libyans to take to the streets to show
their loyalty to his government.

"All of you who love Muammar Gaddafi, go out the
streets, secure the streets, don't be afraid of them ... Chase them, arrest
them, hand them over to the security (forces)," he said.

Several hundred people held a pro-Gaddafi rally in
Tripoli's central Green Square on Tuesday, a Reuters reporter there said.
"Our leader!" and "We follow your path!," they chanted,
waving green Libyan flags and holding aloft portraits of Gaddafi.

"There are several hundred (Gaddafi) supporters
making their way into the city center. They are in cars, making lots of noise
and carrying his portrait," said one resident of the city.

"They fired shots in the air to celebrate."

Tripoli, a Mediterranean coastal city of 2 million, is
key to controlling Libya, a mostly desert country of only 7 million.

Refugees streaming across the Libya's eastern border into
Egypt said Gaddafi was using tanks, warplanes and foreign mercenaries to fight
the growing rebellion.

Eastern Libya is no longer under Gaddafi's control, rebel
soldiers in the city of Tobruk told a Reuters reporter there.

Tobruk residents said the city had been in the hands of
the people for three days. They said smoke rising above the city was from a
munitions depot bombed by troops loyal to one of Gaddafi's sons. There was the
occasional explosion.

"All the eastern regions are out of Gaddafi's
control ... The people and the army are hand-in-hand here," said the now
former army major Hany Saad Marjaa.

The U.N. refugee agency urged Libya's neighbours to grant
refuge to those fleeing the unrest.

"NO SURRENDER"

On the Libyan side of the border with Egypt, anti-Gaddafi
rebels armed with clubs and Kalashnikov assault rifles welcomed visitors. One
man held an upside-down picture of Gaddafi defaced with the words "the
butcher tyrant, murderer of Libyans," a Reuters correspondent who crossed
into Libya reported.

Hundreds of Egyptians flowed out of Libya on tractors and
trucks, telling harrowing tales of state violence and banditry.

In the eastern town of Al Bayda, resident Marai Al Mahry
told Reuters by telephone that 26 people including his brother Ahmed had been
shot dead overnight by Gaddafi loyalists.

"They shoot you just for walking on the
street," he said, sobbing uncontrollably as he appealed for help.

Protesters were attacked with tanks and warplanes, he
said.

"The only thing we can do now is not give up, no
surrender, no going back. We will die anyways, whether we like it or not. It is
clear that they don't care whether we live or not. This is genocide," said
Mahry, 42.

Human Rights Watch said 62 people had died in clashes in
Tripoli in the past two days, on top of its previous toll of 233 dead.
Opposition groups put the figure far much higher.

The revolt in Libya, the third largest oil producer in
Africa, has driven oil prices to a 2 1/2 year high above $108 a barrel, and
OPEC said it would produce more crude if supplies from member Libya were
disrupted.

Libyan guards have withdrawn from their side of the
border and Egypt's new military rulers, who took power following the overthrow
of President Hosni Mubarak on February 11, said the main crossing would be kept
open round-the-clock to allow the sick and wounded to enter.

"Five people died on the street where I live,"
Mohamed Jalaly, 40, told Reuters at Salum on his way to Cairo from Benghazi.
"You leave Benghazi and then you have ... nothing but gangs and youths
with weapons," he added. "The way from Benghazi is extremely dangerous,"
he said.

As the fighting has intensified some supporters have
abandoned Gaddafi. Tripoli's envoy to India, Ali al-Essawi, resigned and told
Reuters that African mercenaries had been recruited to help put down protests.

"The fall of Gaddafi is the imperative of the people
in streets," he said. The justice minister also quit and a group of army
officers urged soldiers to "join the people."

A showman-like figure with his flowing robes and a
penchant for female bodyguards, Gaddafi has been one of the most recognizable
figures on the world stage in recent history.

He has shunned by the West for much of his rule which
accused him of links to terrorism and revolutionary movements. U.S. President
Ronald Reagan called him a "mad dog" and sent war planes to bomb
Libya in 1986.

Gaddafi was particularly reviled after the 1988 Pan Am
airliner bombing over Lockerbie, Scotland, by Libyan agents in which 270 people
were killed.